Quality description of profitability of the fisheries industry statistics
Compiler: The Natural Resources Institute Finland
Basis of compilation: Provisions on the EU programme for the collection of data in the fisheries sector are laid down in Regulation (EU) 2017/1004 of the European Parliament and of the Council. Detailed rules, definitions and requirements are presented in Commission Regulations (EU) No 2019/909 and (EU) 2019/910.
Funding: Production of data is funded by the European Maritime and Fisheries Fund (EMFF).
1. Relevance of data
1.1. Content and purpose of use
EU legislation obliges Finland to gather detailed data on the Finnish fisheries industry. The EU programme for fisheries data collection seeks to gather biological, economic, and statistical data on fisheries to support the Common Fisheries Policy. The European Commission uses the data obtained through the fisheries data collection programme for the planning of its fisheries policy and the monitoring of the policy’s impacts.
Among other things, data on profitability is used to provide support for and monitor the national fisheries policy, to monitor and develop the common fisheries policy of the EU, and for economic research. The data is used by fisheries entrepreneurs, students, researchers and lobbyists as well as the administration.
1.2. Glossary
The scale and profitability of the fisheries industry sectors is described using the operating income, value added, operating margin and net result.
Total income includes, in addition to turnover and direct subsidies, other income, such as compensation and rental income.
Value added means the value contributed by the industry. Value added is the difference between an industry's output (income) and input (material and equipment acquisitions, external services, and other operating costs, such as personnel). The value added includes items that contribute to GDP, such as wages and salaries, capital expenditure, taxes and profit. The value added ratio is the value added as a percentage of total income.
The operating margin shows a company's operating result before depreciation and financial items. The operating margin ratio shows the result, after the deduction of fixed and variable costs, as a percentage of total income.
The net result is a measure of profitability. It shows a company's profit after taxes and before extraordinary income and expenditure. The net profit ratio is the net result as a percentage of total income.
Pay adjustments have not been used when calculating the key indicators’ operating margin and net profit.
Net investments consist of the industry's tangible and intangible investments.
The equity ratio is the key indicator of solvency. It shows the percentage of total assets that are funded by shareholders’ equity. The adjusted equity ratio uses the adjusted balance sheet total minus advances received. The Finnish Company Advisory Board (YTN) has issued the following guidelines on this key indicator:
Equity ratio:
over 40% good
20–40% satisfactory
under 20% poor
The key indicator for liquidity is the current ratio. It shows a company's assets (current assets plus financial assets) as a percentage of its current liabilities. This key indicator therefore considers the potential realisation of current assets to maintain liquidity. The Finnish Company Advisory Board (YTN) has issued the following guidelines on this key indicator:
Current ratio:
over 2 good
1–2 satisfactory
under 1 poor
1.3. Classification
Fishing companies are divided into large trawlers (vessels over 24 metres) and small trawlers (vessels under 24 metres), coastal fishers with turnover of over EUR 10,000 and coastal fishers with turnover of under EUR 10,000. Annual turnover of EUR 10,000 is the limit for VAT liability. As of 2016, this same monetary limit has also been applied by the new Fishing Act to divide commercial professional fishing companies into Type I and Type II in the register of professional fishers.
Aquaculture companies are divided into five categories based on their main production orientation: marine food fish production, freshwater food fish production, recirculating aquaculture systems, hatcheries and nurseries, and ponds.
Companies in the fish processing, wholesale and retail sectors have been divided into three size groups based on turnover: large companies (largest 10% ), mid-size companies (largest 40% of the remaining) and small companies.
1.4. Research subject and informants
The EU programme for fisheries data collection seeks to gather biological, economic, and statistical data on fisheries to support the Common Fisheries Policy.
The data is retrieved from Natural Resources Institute Finland’s statistics on the production data of fishing and aquaculture companies and Statistics Finland's data on financial statements of the fisheries industry (fishing, aquaculture, fish processing, wholesale, retail).
2. Accuracy and reliability of data
2.1. Research method
Statistics Finland's data on financial statements of the fisheries industry sectors (fishing, aquaculture, fish processing, wholesale, retail) and Natural Resources Institute Finland’s statistics on the production data of fishing and aquaculture companies are used as the materials.
Finland's commercial fishing register lists approximately 2,000 commercial fishermen with an obligation to report their catches in the sea area. The fisheries industry profitability data covers all commercial, professional fishing companies that report their catches in the sea area. No key financial indicators are available for commercial fishing in freshwaters.
The financial information pertaining to the industry and its companies is based on Statistics Finland’s financial statement data from commercial fisheries companies. The Natural Resources Institute Finland calculates the key financial indicators for different sectors of the fisheries industry on the basis of financial statements.
2.2 Factors affecting reliability
In the case of fish processing, fish wholesale and fish retail sectors and companies, the financial statements information collected by Statistics Finland covers enterprises whose field of business according to the Enterprise Register is one of the above. The financial statements regarding commercial marine fishing and aquaculture contain all main activity companies and fishers. Key indicators for the profitability of small companies paint a rosier picture than reality, as small-scale entrepreneurs often do not pay themselves salaries, taking their income directly from the company's net profit instead. Statistics Finland adjusts the results of small companies using a calculatory pay adjustment. In this page, the pay adjustment has not been taken into account, because the fisheries industry is mostly made up of small businesses that only operate seasonally.
3. Timeliness and promptness of published data
The data is published annually. The data that Statistics Finland collects on the financial statements of companies in the fisheries industry is only made available to the Natural Resources Institute Finland in the year after the financial statements are published, meaning that the latest data covers the preceding year.
4. Coherence and comparability of data
Statistics Finland determines the field of business of each company on the basis of the company’s own report, as well as on the basis of turnover reviews. The large companies operate in several sectors. For example, the primary sector of a major fish farmer can actually be fish wholesaling or fish processing. Many fishing companies engage in fish processing activities. A company can be listed as a fish wholesaler or a fish processing company depending on the proportion of sales that the products processed in the company account for each year. As the result, a company operating in more than one sector may be transferred from one sector to another. Change in the listing of large company can impact the result of the entire sector.
The fish retail sector covers only the stores that specialise in fish retail. Most fish is sold to consumers at the supermarket fish counters. Supermarket sales fall into the fish retail sector only if the fish counter is managed by a company that has fish retail as its primary business activity.
5. Availability and accessibility of data
The data is published annually at times recorded on the publication calendar on Natural Resources Institute Finland’s online resources, at: www.luke.fi/en/statistics and www.luke.fi/taloustohtori. Additionally, the Fisheries Industry Review is published under Natural resources and bioeconomy studies publication series by the Natural Resources Institute Finland.